What is Polygon (MATIC)?
Polygon is a layer2 scaling solution built on Ethereum that aids developers in building decentralized apps without having to worry about network congestion and security issues.
What is Polygon (MATIC)?
Polygon seems to be the go-to blockchain when looking for a blockchain that is fast and scalable. In this article, you’re going to find out what Polygon is, how it works, and what makes it stand out from its competitors.
What is Polygon?
Polygon is a layer2 scaling solution built on the Ethereum blockchain that aids developers in building decentralized apps (DApps) without having to worry about network congestion and security issues.
Polygon launched as Matic network in 2017 but later rebranded in 2021. It was co-founded by Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun.
Jaynti Kanani and Sandeep Nailwal are both developers while Anurag Arjun is a Successful entrepreneur.
Before launching the Matic network, they contributed a lot to the Ethereum blockchain. Working on the Plasma MVP, Wallet connect protocol, and Dagger event notification engine.
Jayanti Kanani now sits as the CEO of the polygon blockchain.
Polygon Aims to solve blockchain scalability issues and it currently helps the Ethereum network solve the high transaction fees it has been facing for a long time now.
Although it currently supports only Ethereum as the base chain, it plans to expand to other chains, making polygon interoperable
How does Polygon work?
Polygon uses a modified version of the Proof-of-stake consensus mechanism to achieve consensus. This mechanism requires network participants to stake their MATIC In exchange for the right to validate its transactions. Validators in the polygon network are rewarded with MATIC, Its native token.
The Ethereum blockchain, as robust as it is, still faces scalability issues. The average transaction per second on the Ethereum network is currently at 15TPS. Each transaction comes with transaction fees and these fees can be expensive due to network congestion from DApps, and NFTs. For example, the rise of the crypto kitties in 2017 caused an overload in the Ethereum network making gas prices rise at an insane rate.
These high transaction fees and low transaction times often discourage users from interacting with DApps on Ethereum and seek other blockchains to perform transactions, thereby limiting Ethereum’s potential.
Polygon helps solve this issue by processing transactions on Side chains.
Sidechains are unique blockchains that are tied to the main Ethereum blockchain and can be used to support Decentralized platforms on Ethereum.
One of the key features of the polygon network is the software development Kit (SDK) which is used to build Ethereum-Compatible decentralized applications as sidechains and connect them to Ethereum’s blockchain.
Sidechains can be built using one of the following methods;
Plasmachains– plasma chains bundle transactions into blocks batched into one submission on Ethereum.
Zero-knowledge Rollops– zK -Rollups allow multiple transfers to be bundled into one transaction.
Optimistic Rollups– can perform tasks like the plasma chains but with Ethereum smart-contract compatibility.
Each unique solution is suited for different DApps as no single is suitable for all. Each solution has its tradeoffs between security, scalability, and sovereignty so the developers can choose the one that bests fits the DApp
The MATIC token
MATIC is the native token of the polygon network. MATIC is an ERC-20 token on the Ethereum blockchain. It is used to pay transaction fees. All transaction fees on the plasma chain will be generated using the MATIC token. This means that every project that uses polygon as a scaling solution will make use of the MATIC token thereby driving demand. MATIC is also used for governance and as a means of securing the network.
MATIC has a maximum supply of 10 Billion tokens and 8.7 billion of those tokens are currently in circulation.
Fees on the MATIC network are burned to reduce supply. Polygon projected an annual MATIC burn of 27 million tokens. This deflationary mechanism will help in deriving more value for the MATIC token.
What’s unique about polygon?
Polygon helps Ethereum, the world’s largest blockchain by market cap become more scalable and efficient.
Polygon can deploy existing blockchain networks and develop custom blockchains. It can also enable effective communication between Ethereum and other blockchains.
Polygon is one of the largest Ethereum scaling solutions with a $6.7B market cap as of the time of writing. The team has relentlessly worked hard to enable polygon to climb its way to the top 25 cryptocurrencies by market cap.
Polygon is able to process transactions at high speed and with low transaction costs. It can handle up to 65,000 transactions per second with an average fee of $0.01.
Over 19,000 Dapps have used Polygon to scale their performance.
Polygon vs Ethereum
Polygon is not competing with Ethereum. Rather it is an Ethereum scaling solution.
Ethereum’s average transaction per second is 15. while Polygon can perform 50,000 TPS.
Gas fees on Ethereum can rise up to $50 but on Polygon, the transaction cost is a fraction of that. With polygon, protocols building on Ethereum will become cheaper and faster.
Even with Ethereum transitioning to Ethereum 2.0, layer 2 scaling solutions will still be playing an important role in scaling Ethereum to make it more efficient.
Polygon has kept on improving its technology since its launch. Many upgrades have been tested and deployed over the years. Its ability to perform fast transactions has made it attractive for large-scale adoption.
Recently Instagram, one of the social media giants launched its NFT feature on the polygon blockchain. Developers are also scaling their various DApps using matic. With its impressive portfolio, Polygon can be said to have an edge over its competitors.
Now read What is Avalanche (AVAX)?